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Mid-Session Update on State TBED Proposals

March 07, 2012

As many states near the mid-point of their 2012 legislative sessions, we thought it would be a good time to take a look at some of the bills advancing in statehouses that could impact states' efforts to improve economic conditions. Several states are seeking to advance access to capital initiatives as they continue to struggle with declining revenue and tight credit restrictions. The following overview provides a sampling of TBED bills supporting access to capital, R&D enhancements and higher education standards.

Providing Access to Capital

The Arizona Senate approved last month a bill to empower the state to facilitate $250 million in loans to manufacturers and other businesses by allowing third parties to sell income and insurance premium tax credits to venture capital firms, banks and other lenders, reports The Arizona Capitol Times. Supporters say the program, which has been employed at the federal level over the last decade under the New Markets structure, has been adopted successfully by nine other states. The measure awaits action in the House.

Hoping to stimulate venture capital investment in Colorado, the Senate passed SB 58, the Colorado Entrepreneur Act. The measure would establish a Venture Capital Advisory Board to examine current obstacles and develop strategic methods for increasing the availability of capital in the states. The measure is being considered in the House.

Lawmakers in Kentucky want to extend an angel investor tax credit to individuals for investment in high-tech companies (HB 113). The tax credit, capped at $40 million, currently is available only to companies.

A bill making its way through the New Jersey Senate would create an angel investor tax credit program with the goal of spurring more money for emerging high-tech and biotech companies. S 581 would allow investors to capture a tax credit to 10 percent of their investment, up to $500,000 a year. The program would be capped at $25 million annually.

Lawmakers in Oregon passed HB 4040, the Oregon Investment Act. The measure establishes the Oregon Growth Fund and Oregon Growth Board to encourage investment in and availability of capital to Oregon businesses.

Enhancing R&D

A measure to provide tax credits for R&D was passed last week by the Alaska House of Representatives. HB 118 provides a 20 percent tax credit on qualified R&D expenditures not to exceed $10 million per year. The measure awaits action in the Senate.

A new bill introduced in Maryland would increase funding for the state's R&D tax credit to $18 million a year, up from $6 million a year. The legislation also would expand the credit so that smaller companies would be able to use the credit even if they do not owe corporate income tax, reports the Baltimore Business Journal. The measure, SB 570, is set for a hearing on March 9.

Lawmakers in Nebraska advanced a measure (LB 983) to strike limitation on the number of years a taxpayer can claim the state's R&D tax credits, which currently is limited to five years. This includes credits applied to university-based R&D projects.

Improving Higher Education Standards

The House voted 85-28 in favor of HB 7129 allowing qualifying Florida universities to set tuition at differentiated and market rates. This includes the ability to set tuition rates higher for different types of programs. The goal of the Academic and Research Excellence and National Preeminence Act is to elevate the university system's global standing for research and innovation. Qualifying universities would have to meet 11 of 14 academic and research standards. The measure awaits action in the Senate.

Alaska, Arizona, Colorado, Florida, Kentucky, Maine, Maryland, Michigan, Nebraska, New Jersey, New Mexico, Oregonstate tbed, tax credits, higher ed, r&d, capital, angel capital